CORRUPT EX TOP BRASS UNTOUCHEDCOMMISSION RECOMMENDED STERN ACTION BUT OFFENDERS AT LARGE

@ LBN /27Apr2008

Nearly three months after the official submission of the report by a Presidential Commission which implicated several senior military officers, including several ex security forces commanders in arms procurement malpractices, the offenders are still at large and continue to hold top government positions, LAKBIMAnEWS learnt.

The Presidential Commission chaired by Justice Shirani Thilakawardene implicated several ex commanders of Sri Lanka Army, Navy and Air Force and several senior officers guilty of not following tender procedures, which ultimately resulted in troops getting inferior design weapon systems.The report recommended stern action against the offenders including the abolition of civic rights. According to one finding of the Commission report, for instance, Fast Attack Craft received by the SLN were three meters short of specific craft length.

A senior commission source earlier told LAKBIMAnEWS that tender procedures had not been followed and procurement process had been conducted arbitrarily under the pretext of national security. Former commander of the Army Lt. General Lionel Balagalla, Former Chief of Defence Staff Admiral Daya Sandagiri and former Air Force Commander Air Vice Marshal Jayalath Weerakkody and several other senior military officials are implicated in the report.

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Post subject: Big stink over Schmel Launchers

Posted: Sat Jun 28, 2008 12:05 pm

Big stink over Schmel Launchers

A multi-million dollar deal for a 'banned' item has caused uproar in the army and the defence establishment with even the army commander being dragged into the scandal as arms dealers trade charges

By: Frederica Jansz @ Sunday Leader - August 12th, 2001

A multi-million dollar arms deal for a weapon banned by the Americans and now manufactured and sold only by the Russians has been negotiated by the Sri Lanka Army via a third party and has resulted in senior army officers and weapons agents crying 'foul.'

Even the Sri Lankan Army Commander has not been spared in this instance from an allegation that he demanded a multi-million rupee commission on a top-secret weapons purchase for the Army. As the dogs of war spit their fury at each other, millions of dollars are at stake. Blood money, which will line the pockets of weapons sharks, making fast bucks as the war in Sri Lanka continues with renewed force and soldiers and civilians pay the supreme price.

The Sunday Leader has found in its investigation that not only are arms dealers and senior army officers fighting to secure fast bucks, 1000 units of the weapon in question for which the Army paid millions of dollars is of old stock and may have even exceeded its shelf life.

The local agent not allowed arms dealer this time around is a senior retired Sri Lanka army officer. Now director for a British-based firm, Gladstone Industrial Holdings Limited, Lieutenant Colonel Upali Gajanayake, (rtd) has allegedly told the former Chairman of Gladstone, Ameer Temour, that a bribe of over USD 500,000 was needed to be paid to the Sri Lanka Army Commander, Lt. Gen. Lionel Balagalla, the Director of Plans, Brigadier V. R. de Silva and to the Director of Ordnance, Brigadier Lal Fernando, for supplying RPO-A Shmel Rocket Launchers to the Army.

The ugly 'deal' was exposed after Ameer Temour, was kicked out of Gladstone in July this year, when he refused to sign a request, allegedly made by Lt. Col. Upali Gajanayake to pay commissions to the army's top brass in Sri Lanka.

The Sri Lanka Army in January this year awarded a tender to Gladstone Industrial Holdings Limited, to purchase 1000 units of RPO-A Shmel rocket launchers. Although usually referred to in descriptive literature as a flame-thrower, the RPO-A Shmel, is a rocket propelled incendiary/blast project launcher. (See box for description).

Army Commander Lt. Gen. Lionel Balagalla was personally informed by the Deputy Director from KBP Instrument Design Bureau in Russia, which company manufactures this weapon, that the right for export of RPO-A Shmel Rocket Launchers manufactured after 1999 has not been transferred to any foreign company.

The commander for reasons best known only to himself however chose to ignore this fact when he went ahead and awarded a tender to Gladstone which obviously did not have the right to supply stocks of the brand new weapon.

In fact a senior army officer who was sent to the Ukraine to inspect the goods early this year, says he was shown the items only once while for 90 days he twiddled his thumbs and repeated requests to view the stocks were turned down. The commander of the army insisted that he continue to stay in the Ukraine. Finally, the officer was taken on a Saturday afternoon to a warehouse and given only one hour to inspect 1000 units of the RPO-A Shmel Rockets. The army officer immediately found that the weapons had been manufactured in 1989 and 1991 respectively. He informed the commander but the greenlight was given and the supply arrived in Sri Lanka.

Gladstone delivered the goods to the SLA on July 17, 2001 when all 1000 units of the RPO-A Shmel Rocket Launchers were delivered in one aircraft to the SLA. (See box for interview with Lt. Col. Upali Gajanayake).

The items however were in serious contradiction of the LC opened by the Sri Lanka Army and original invoice submitted to the Army by Gladstone. In this invoice, Gladstone clearly stated that the purchase would be for an ex stock of brand new 1000 units of the RPO-A Shmel rockets, manufactured in 1999. The weapons when inspected before being loaded at Domodedovo, Russia, according to a top army officer, bore the year of production as 1989 and 1991. In fact, the Army accepted 400 units of Schmel manufactured in 1989 and 600 units manufactured in 1991.

This would explain how Gladstone was able to negotiate the supply and export the items without contravening any rights the manufacturing company KBP in Russia held to be the sole authority to supply the brand new item.

The Sri Lanka Army in fact on March 8, this year amended its original Letter of Credit with the Bank of Ceylon, UK. The Army requested the bank to delete clause 47 A (A) which states that "the beneficiary is advised by the issuing bank though the advising bank that a performance bond for USD 369,800.00 issued at beneficiary's expense by their bank is acceptable to the applicant." Deletion of this clause meant the Army was aware the performance bond could not be maintained unless the items were brand new.

The commander also changed the payment terms from an initial 40% against shipping document to 60% and a 60% payment on authorisation by the commander that the entire shipment is to his satisfaction was reduced to a 40% payment. This was because the commander later agreed to release 60% of the total amount of monies to Gladstone even before the items arrived in Sri Lanka.

The commander also informed the bank that the guarantee issued by the supplier with regard to the rejected items is also acceptable.

By this time, a major conflict had arisen between Gajanayake and his Chief Executive Officer, at Gladstone. According to Col. Upali Gajanayake, Ameer Temour was appointed CEO of Gladstone in order to secure this deal with the Russian arms agents. Temour too confirmed this fact to The Sunday Leader.

S. E. A. Ameer Temour, appointed as Chief Executive Officer of Gladstone, was voted out of the company on July 16, 2001, a day before the sensitive military goods were delivered to the Sri Lanka Army.

Temour told The Sunday Leader that he was voted out of the directorship of Gladstone Industrial Holdings because he refused to sign a request by Lt. Col. Upali Gajanayake for an extra sum of USD 549,000,00. An assignment of monies, which Gajanayake had alleged he needed to pay bribes that had been unexpectedly demanded from him by senior Sri Lankan army officers. Namely, the Commander of the Sri Lanka Army and two brigadiers, one in charge of plans and the other in charge of ordnance.

Ameer Temour stated that he is witness to the fact that both Brigadier V. R. de Silva and Brigadier Lal Fernando of the Sri Lanka Army did request a commission on the supply of 1000 units of RPO-A Shmel Rocket Launchers from Gladstone. "I am a witness to the telephone conversation Lt. Col. Upali Gajanayake had with these two officers where commissions were requested by the two army officers concerned," Temour alleged, adding however that he cannot verify if the Army Commander too solicited a bribe. With regard to Lt. Gen. Lionel Balagalla, Temour says, only Lt. Col. Gajanayake claimed that the army chief had also demanded a commission.

According to Temour, Lt. Col. Gajanayake alleged that in addition to the army officers named, he had to also bribe certain people in the Treasury. Temour says that Gajanayake had insisted that he had bought a car for a Treasury official and was going to buy another, for someone else, also from the Treasury. Lt. Col. Gajanayake when quizzed, denied these allegations.

Determined to prove that Gajanayake did indeed request the monies and that an assignment for USD 549,000.00 is with the Bank of Ceylon in the UK, Temour on August 3, 2001, requested the Bank which is situated at Devonshire Square, London, to forward copies; of the commercial invoice of Gladstone Industrial Holdings, Ltd.; of the assignment for Upali Gajanayake for the sum of USD 549,000.00 and a copy of the assignment for another Sri Lankan party for the sum of USD 950,000.00. (The purpose of the latter figure remains a mystery).

The Bank of Ceylon, in its reply to Temour on the same day, did not deny that the bank did in fact have the requested documents. N. C. B. Ekanayake, Country Manager, Bank of Ceylon, London, wrote that he regrets being unable to forward the required documents which the bank had copies of, including a copy of the assignment for Upali Gajanayake for the sum of USD 549,000 and a copy of the assignment for another Sri Lankan party for the sum of USD 950,000. The bank manager explained that since Temour was voted out as Director of M/s Gladstone Industrial Holdings Limited with effect from July 16, 2001, the bank could not comply with his request.

Temour says this only confirms his allegation that Lt. Col. Upali Gajanayake did in fact request that an assignment of USD 549,000 be credited to his bank account out of the proceeds of the L/C issued by the Sri Lanka Army in favour of Gladstone.

Lt. Col. Upali Gajanayake has vehemently denied the charge. He says that Ameer Temour is corrupt and began playing a double game by conniving with Nalin Fonseka to supply the item at a higher price to the Sri Lanka Army and undercut Gladstone. (See box).

Temour in turn has refuted this accusation, saying that he has never in his entire life ever met Nalin Fonseka.

Quote, "I have never ever met or even spoken to Mr. Nalin Fonseka, (I would like to have his telephone number, which I have never had, because he cannot possibly be a bigger crook than Mr. Gajanayake and probably next time I should try to work through him) and I never tried to undercut Mr. Gajanayake and Gladstone -- as a matter of fact, without me they would have never been able to sign the deal in question, and I have all the documents to prove it. As for being corrupt -- I must be a stupidly corrupted person, spending my own money and not getting a penny out of this up till now." (See box for comments)

Nalin Fonseka meanwhile also told The Sunday Leader that he has never met or spoken with Ameer Temour.

Ameer Temour asserted that the amount of Shmel Rockets, according to the contract with Gladstone, was for 1000 (one thousand) pieces. Gladstone signed the contract with the Russian Agent for US$2,500,000 and sold the item to the Sri Lankan Army for US$3,698,000.00.

Lt. Col. Upali Gajanayake confirmed the same price, adding that the offer from Gladstone to the Sri Lanka Army for 1000 units of the Shmel Rocket Launchers was for USD 3,698,000 million, included FOB and was far less than the previous purchase the Army made, when it bought 1000 units of this weapon for USD 4,995,000.

Lt. Col. Gajanayake told The Sunday Leader that his offer to the army was one million dollars lower than the offer made by International Energetics Limited last year. Nalin Fonseka helped coordinate the deal for the latter in Sri Lanka in that instance.

According to Gajanayake, mud has been plastered all over the present deal by Nalin Fonseka, who he alleges is angry that the recent consignment for RPO-A Shmel rockets, was awarded to Gladstone.

Gajanayake says Fonseka could not deliver suitably when he was awarded the tender last year to supply the army with 1000 nos. of this weapon. Gajanayake claims that Nalin Fonseka assisting International Energetics Ltd, delivered only 900 units of the weapon last year, when the army required 1000.

In fact, a letter written from the International Energetics office in the Ukraine last year disclosed details of the order made and explained that the reason for the shortfall was apparently because there were problems in obtaining an export license for the sensitive equipment involved.

Meanwhile, Lt. Col Upali Gajanayake vehemently defended his position in the present deal. "I have a company in London called Gladstone and I am not in this arms and ammunition trade. Though I am an ex army officer I have not got involved for the last 10 years since I left the army. But I helped the army this time because I was groomed in the army. When I found I could secure this deal through my international contacts, and that I could do something for the Army I got involved," Lt. Col. Gajanayake explained, adding, "but my problem was I wanted to get the best deal for the Sri Lanka Army whilst also making money. I, as a senior retired army officer would never attempt to negotiate underhand deals with the army."

Quizzed as to how much his commission would be, after having delivered the weapons to the Sri Lanka Army, Gajanayake said, "around three to four hundred thousand USD."

The army, Gajanayake claimed, cannot buy this weapon via an open tender as the "Americans are against the selling of this weapon," and this item can be purchased only in the Ukraine, Russia, by a middleman.

This was apparently where Ameer Temour figured, as it was he who had the contact in the Ukraine to purchase the product and not Lt. Col. Upali Gajanayake or the other two directors at Gladstone, namely, Mahendren Munsamy (Financial Director) and Robert K.Hanson (Marketing Director).

Lt. Col. Gajanayake said he together with Munsamy and Hanson could not take any action against Temour earlier as they were dependent on him to meet the supplier in the Ukraine. "We waited until the order had arrived in Sri Lanka before kicking him out of the company," he said.

Ameer Temour reiterated that Gajanayake eventually got the two other directors on to his side by threatening that the company would have problems from the buyer if it refused to pay the commissions demanded by Senior Army officers. Temour continued to voice his dissent and as a result was voted out.

Temour claims that up to date he has not been paid a penny for his efforts. He refuted Lt. Col. Gajanayake's claim that the two other directors at Gladstone were forced to mortgage their homes in order to finance this deal.

Temour asserted, "Mr. Munsamy does not have a home in London, because he is based in South Africa, and Mr. Hanson lives in Kent. Mr. Hanson, though, kept saying that last year he had to borrow about �40,000.00 on his house to pay Mr. Gajanayake to secure this deal -- as you can see it had nothing to do with financing the deal itself."

The scandal revolving around the purchase of RPO-A Rocket Launchers first broke in September last year. Tempers flared between the Army Commander Lt. General Lionel Balagalle and his former Chief of Staff, Major General Janaka Perera, when the army made an attempt to purchase 1000 units of RPO-A Shmel Rocket Infantry Flame Throwers through a local arms dealer at a price of USD 4,995 for 1000 units. (Approximately 450 million rupees).

The Sunday Leader in an expose in February, this year, pointed out that the real market value of a unit of this weapon is only USD 3,600. Therefore for 1000 units, the cost should be only USD 3,600,000 or approximately Rs. 324 million. This figure was revealed when the government sought to purchase 10,000 more units of this weapon from several other buyers.

Angry letters were exchanged between the army's two top ranking officers. It was alleged that Maj. Gen. Janaka Perera committed a faux pas when he issued three End User Certificates for the same article (RPO-A Shmel) to three different companies. One of which was to KBP from Russia, another to International Energetics Limited and the third to Gladstone Industrial Holdings Ltd.

Army Chief, Lt. Gen. Lionel Balagalla accused Maj. Gen. Janaka Perera of seriously compromising the security of purchasing weapons for the Sri Lanka Army by issuing the End User Certificates.

On January 14 this year, Lt. Gen. Lionel Balagalla angrily reprimanded Maj. Gen. Janaka Perera in writing, stating that by issuing the EUCs, Perera had caused a situation that could result, "in serious consequences, if unsuccessful suppliers obtain the export licenses from their governments and supply to unauthorised users, particularly the LTTE."

Major General Janaka Perera's reply to this missive was equally strong. He wrote, "at no stage did I give directions to issue EUCs but only made certain suggestions and guidelines to Director Plans on End User Certificates as it was found that the suppliers quote exorbitant prices. Initial stock was ordered as USD 4.995 per unit (total cost USD 4,995,000 for 1000 pcs) when the present value is F. O. B. USD 3,600 per unit, into 1000 units would be USD 3,600,000."

Major General Perera had pointed out on that occasion that it was Balagalla who had negotiated the deal with Gladstone and directed the issue of an End User Certificate.

And now, it is the same Gladstone that has secured this multi-million dollar deal.

Lt. Gen. Lionel Balagalla stays mum.......

Commander for the Sri Lanka Army, Lt. Gen. Lionel Balagalla, when asked if indeed he had solicited a commission from Gladstone for the supply of 1000 units of RPO-A Shmel Rocket Launchers, responded that he would require clearance from the Ministry of Defence before being in a position to reply our questions.

Though given two days notice, up to the time this paper went into print, the commander remained mute.

Instead, Military Spokesman, Brigadier Sanath Karunaratne replied on behalf of the commander that all purchases exceeding five million rupees require the express approval of the Ministry of Defence.

Brigadier Karunaratne added that it is not customary for Army Headquarters to reveal details of any procurements. He asserted that "greater care is exercised particularly in instances that are of a highly sensitive nature. This is based on national security interests. Moreover, enemy access to such information can not only endanger the lives of soldiers but also lead to other dangerous consequences."

Unfortunately for the Brigadier and the Sri Lanka Army, explicit details of the RPO-A Shmel Rocket Launcher is freely available on the Internet. The LTTE would certainly not have to depend on the investigative capabilities of The Sunday Leader to gather such information.

Meanwhile, Brigadier Karunaratne on behalf of the Army Commander said that, "Army Headquarters is not aware of allegations of money being offered to any officer or officers. If any one is in possession of such information or evidence, it could be made available to the Ministry of Defence, so they may initiate inquiries through appropriate official channels. Army Headquarters will also investigate if such complaints are made."

A description of the weapon by Terry Gander on Jane's Land Forces.......

A description of the weapon, states the RPO-A Shmel is a single tube launcher normally issued in pairs joined together to be carried as a back-pack using two slings.

To operate the launcher, the two tubes are separated and a simple optical sight calibrated to 600m is flipped up. Launching is from over the shoulder using a folding pistol grip and trigger assembly together with a forward grip under the muzzle. The launcher can be fired from within structures having a volume of over 60 m3. Once fired the launcher tube is discarded.

The RPO-A Shmel is issued to airborne and marine assault troops to destroy strongpoints (for example bunkers) or lightly armoured vehicles. In Afghanistan the weapon was used to clear Mujahideen from caves. It is also claimed that the RPO-A could have peaceful applications as it can be used to destroy ice jams in rivers, break up potential snow avalanches or extinguish fires by the blast effect.

The effect of the RPO-A projectile is such, that when detonated inside a structure, its lethal and destructive effects will cover an area of 80 m3, claimed to be similar to an equivalent 122 mm artillery projectile. When utilised against personnel in the open, the lethal area will cover 50 m2. Maximum range is 1000 m but the sights are calibrated to only 600 m. Shelf life of the RPO-A Shmel is 10 years and it can be operated over a temperature range from -50 to +50 centigrade.

Developed by the Russians, the weapon is sold underground as the USA and European nations have banned the purchase and use of this weapon for warfare.

Development of this weapon began in 1984 and it was accepted for service four years later. One projectile fired is described by the Russians as 'thermobaric' as it appears to utilise advanced fuel-air explosive techniques which, on detonation, create deflagration as the warhead cloud expands. This produces a relatively long-lasting blast effect in addition to the high temperature effects. When utilized against structures the blast effect of this projectile is stated to be equivalent to a 122 mm howitzer projectile.

The sharks at play

The 'deal' for RPO-A Shmel Rocket Launchers according to Lt. Col. Upali Gajanayake

"This deal was very genuine. I was happy with the way the army treated me, the commander treated me very well.

We are still having problems with this because of the party against this transaction. This is because of Nalin Fonseka -- he is the party who coordinated the deal on behalf When I offered about 1400 dollars less for each unit of RPO-A Shmel Rocket Launchers I saved more than one million dollars for the army.......

Nalin Fonseka got very upset and told me that I am destroying the structure of the pricing.... I told him I am making a little money too -- whilst making money the price Fonseka quoted to the Army was very high.

Because I offered a very low price the army decided to accept my offer which is inclusive of freight charges.

The entire consignment has been delivered to the army but we have not yet got our money -- our expenditure has shot up -- we had to pay four hundred thousand USD to investors.

We were given four months to honour the deal. Nalin Fonseka kept sending petitions to President Chandrika Kumaratunga. Fonseka was trying hard to expose the Army Commander. He even sent people to London to destroy my company; they infiltrated my company and the Bank of Ceylon in London thinking that if my deal fails, Fonseka can supply the items. But he has been blacklisted by the army. The last time he completely mis-handled and over priced the goods finally supplying one hundred nos. short of what was required............

Major General Janaka Perera made the mistake of offering three End User Certificates; people can misuse these licenses, specially the LTTE. They can use these certificates to bring arms from other countries; that is why the commander is right by observing Maj. Gen. Janaka Perera's mistake.

What Gladstone supplied this time has already been tested and found to be 100% right.

Our commission is very much lower than what other have people got previously; we may have made about USD three to four hundred thousand..........

Ameer Temour was supposed to be the supplier in the beginning; the other directors of Gladstone are from South Africa and Britain respectively. We unfortunately did not know Temour's past track record; he convinced us by saying he is the man to get the RPO-A Shmel rockets from Russia. Later we found he is not the man; some other Russian fellow is getting it done. We found three months back that Nalin Fonseka sent a Muslim gentlemen to London to contact Temour and to secure an arms deal. Temour has been having a relationship with these people but it did not work out for him.

Temour joined our company as a director and was appointed Chief Executive Officer to operate in the Ukraine, but later we found he was trying to play us out and that he is having a separate mandate; so we voted him out.

Why should we pay bribes? I being an ex-army officer will not pay a cent to another army officer -- I had a genuine offer when I offered USD 1000 less on each unit of RPO-A Shmel Rocket Launchers. Even now I am struggling; my debts are running into millions...... How can I offer a commission to the Army Commander when my mark-up was so low?...........

Both the other two directors at Gladstone, the South African and the British Director mortgaged their houses to finance this deal.....

Never, never, never, was a claim made by the Army Commander or the other two officers to pay commissions............ I have a lot of regard and respect for Gen. Lionel Balagalla. He had a tough time because Nalin Fonseka and Major General Janaka Perera got together and hammered him. The Army Commander is absolutely innocent in this. Maj. Gen. Janaka Perera was mishandling this unnecessarily. He did it to cut the commander. It was unreasonable and unethical, genuine people will get demoralised.

The directors of Gladstone are at risk; I am in a major, major, financial difficulty -- that is the reality -- these people are not bothered about the country, they are like sharks in this business. Temour tried to destroy my deal by giving it to Nalin Fonseka.

Ameer Temour is a rogue.

There was never a discussion to pay commissions. We waited till we got the stuff in Sri Lanka... we timed it beautifully and then eliminated Temour. I don't have to pay commissions to any person in Sri Lanka but we had to pay bribes to some people in the Ukraine.

Officially these items cannot be negotiated via an open tender but can only can be bought underground; this is a very sophisticated chemical warhead - it is an internationally banned weapon...........

Financially our company is sinking -- finally people like Ameer Temour, a rogue, will win -- and Nalin Fonseka will dominate -- there really is nothing in this deal; how can we pay these commissions when we buy at a very high premium?"

"I have proof of Gajanayake's demand for money"

The deal according to the former Chief Executive Officer at Gladstone, Ameer Temour.

Q: Is it true that Gladstone had to pay commissions to Russian agents who secured the deal for 1000 units of RPO-A Shmel Rocket Launchers?

A: The amount of Shmel Rockets, according to our contract, was 1000 (one thousand) pieces. Gladstone signed the Contract with the Russian Agent for $2,500,000 and sold the item to the Sri Lankan Army for $3,698,000. The contract with the Russian Agent, who secured the deal, was signed by Gladstone for $2,500,000 and as far as I know, no extra money has been ever demanded by the Russian Agent.

Q: Lt. Col. Upali Gajanayake charges that you are corrupt and was backed by Nalin Fonseka and tried in the process to undercut him and Gladstone. Is this true?

A: I have never ever met or even spoken to Mr. Nalin Fonseka up till now (I would like to have his telephone number, which I have never had, because he cannot possibly be a bigger crook than Mr. Gajanayake and probably next time I should try to work through him) and I never tried to undercut Mr. Gajanayake and Gladstone; as a matter of fact, without me they would have never been able to sign the deal in question, and I have all the documents to prove it. As for being corrupt -- I must be a very badly corrupted person, spending my own money and not getting a penny out of this up till now.

Q: Lt. Col. Upali Gajanayake has denied the accusation that he needed to pay commissions to the army officers named by you. What proof do you have that Gajanayake did indeed assert he needed this money in order to pay commissions to Sri Lankan Army officers?

A: I have a fax from Mr. Gajanayake in which he demands $280,000 as his share in this deal. As well as extra lots of $170,000 and $150,000 for the Army (which he calls PR money) and these were meant out of Gladstone's profit ($1,198,000). Plus there were witnesses -- six people in the room in my house, where Mr. Gajanayake demanded the above money and named the officers he was going to pay. I refused to co-operate and sign the above money for him. The next day they voted me out of the directorship (I was the CEO of Gladstone according to their request) and they also cancelled my cheque which was issued before for my share of the profits (the amount of the cheque was �140.000,00, and similar cheques were issued to each of other three directors of Gladstone -- I have the copies of them as well).

Apart from the above through a Sri Lankan Party Mr. Gajanayake has arranged the finance to make the advance part payment for the goods, which was $750,000, and charged Gladstone $300,000 interest for two weeks. On top of these $300,000, Mr. Gajanayake has got an assignment for $549,000 and this total amount of $849,000 is out of Gladstone's profit ($1,198,000) which leaves only $349,000 for the other directors of Gladstone, two of which, Mr. R. Hanson and Mr. M. Munsamy demanded to take their previous expenses out of it as well (they claimed their expenses to be approximately $400,000 out of which they had previously paid Mr. Gajanayake about $70,000 to secure the deal from the Sri Lankan side).

Of course, Mr. Gajanayake will deny everything, he is not going to admit it to you, but you do not have to believe me either on my say-so, you can check with the Bank -- all of the above has documentary proof.

Q: Is it true that the two other directors for Gladstone are a South African and a Britisher? What are their names?

A: It is true that the other two directors of Gladstone are a South African and a British citizen, their names and addresses are as follows: Mr. Mahendren Munsamy (Financial Director) 7 Harold Ashwell Blvd., Melk Bosstrand, Cape Town, South Africa.

Q: Is it true they have had to mortgage their homes in London to finance this deal?

A: Mr. Munsamy does not have a home in London, because he is based in South Africa, and Mr. Hanson lives in Kent. Mr. Hanson, though, kept saying that last year he had to borrow about �40,000 on his house to pay Mr. Gajanayake to secure this deal -- as you can see it has nothing to do with financing the deal itself.